Senator the Hon Simon Birmingham

Laura Jayes: Joining me live now is the Minister for Finance, Simon Birmingham. Good to see you!

Simon Birmingham: Morning Laura

Laura Jayes: Scott Morrison spoke of game changing strategic circumstances which have accelerated. What is he talking about when he says that?

Simon Birmingham: Well, Laura, for much of Australia's modern history, we have been somewhat isolated, geographically detached from the strategic competition places in the world, the World Wars, the Cold War era and we can be very grateful for that. But we do now find ourself at the centre of the region of greater strategic competition, the Indo-Pacific region where there has been a step up in terms of the military activity and militarisation of the region over a period of time now. Our interests are ensuring peace and stability across this region in protecting the sovereignty of our nation and of other nations across the region. And our investment in this defence capability is about ensuring that we help to provide the type of balance in the region and the type of ability for Australia, along with our partners and friends, and to be best placed to be able to ensure that peace and stability and sovereignty for everyone across the region.

Laura Jayes: This deal is welcomed by Australians, but no doubt comes with a degree of worry. Is it a move that brings us closer to a war with China?

Simon Birmingham: Certainly not. This is a move intended to ensure that we do keep that balance of posture across our partners and friends in a way that in that enables peace and security in this region to be maintained. Of course, we have to be prepared as a nation to be able to work alongside those partners and friends and allies in effective ways and in the most effective way possible when we're talking about spending tens of billions of dollars on different defence procurement activities. We want to make sure we get the best bang for our buck. And the decision that was made and announced yesterday was about determining that in investing in submarine capabilities for the future, which are essential for a maritime nation like Australia and island continent as we are that we ought to invest in the best possible facilities and resources. And the nuclear powered option with the technological changes in recent years has become clearly that best pathway.

Laura Jayes: When this deal was done with the French, it was a different parliament. Of course, Tony Abbott was the prime minister and Nick Xenophon held the balance of power in the Senate. I know you'll remember that very well because of the domestic politics at the time. And Nick Xenophon's big push to make sure that there was a big local manufacturing component. Do we make the wrong decision in a military sense?

Simon Birmingham: I know, Laura, I mean, Malcolm Turnbull, I think, was prime minister when the when the deal was settled, but in terms of the decision made at the time, it was to acquire the best technology Australia could at the time and certainly the attack class submarines, if they were to proceed to be built, would be the best conventional submarines in the water anywhere in the world. Once they once they hit that point, they were very powerful, conventional piece of weaponry. However, what's changed is, of course, as we discussed at the top of the discussion here, the increased strategic competition and militarisation in the region. What's also changed is that the technology in terms of detecting conventional submarines is advancing and is anticipated to advance further and therefore their operational limits become more constrained in the future. Whereas nuclear powered submarines maintain greater levels of stealth, greater ability to operate for longer durations of time, much longer durations of time underwater for far greater distances without needing to come up and snort to recharge their batteries. So we can see here that those technological changes, those changes in capability. But the last piece of the puzzle was really the fact that the technological changes around nuclear powered submarines being developed by the US and the UK give us the ability to get them with a reactor that can service that submarine for its lifetime. And that's the big change there, because it means we don't need to establish a civilian nuclear industry. We don't need to refuel them, undertake uranium processing and enrichment or any of those activities. We can build the submarines here, but essentially have the fuel source for its 30 plus year life.

Laura Jayes: The local component and the manufacturing component of this deal of the old deal is a huge part of the South Australian economy. Can you guarantee that under this new deal that no jobs will be lost?

Simon Birmingham: Indeed, Laura, in fact. I mean, there are many more jobs being created out of the very different aspects that were announced yesterday, we didn't just commit to the change from conventionally powered submarines to nuclear powered submarines. We also committed to undertaking the life of type extension of the Collins class submarines. So from 2026, we will be upgrading the capabilities, the systems, the weaponry arrangements in relation to those existing submarines, which will extend their life and extend their capabilities to help to bridge the gap. We also announced that we're going to be upgrading air warfare destroyers, including applying Tomahawk missile capabilities onto them again and providing additional defences and support. All of those decisions will create extra jobs in South Australia. The nuclear powered submarines themselves will see us create an environment where we're building more technologically sophisticated, larger submarines that will have additional needs not just in Adelaide, but also then when you think about what will be necessary for their basing in Perth for their crews sustainment and other activities. It's why the investment in additional facilities in WA is also going to be so very important for the future,

Laura Jayes: But with nuclear subs come nuclear reactors for that small industry alone. So is that right? Do you expect that there will need to be nuclear reactors in South Australia?

Simon Birmingham: Only insofar as they are used to power the submarines themselves, so we're very clear here, that's the technological change that enables us to do this now in a way that doesn't have to create a civilian nuclear industry doesn't mean we have to pursue other nuclear ambitions. We do this purely solely in a manner where a full life reactor for the submarine is available and able to be installed, and that contains Australia's requirements. We will need to develop all of the skills around safety, security and maintenance and making sure that we do that to the highest standards. That's what the US and the UK expect, as well as what we expect. But the US and the UK have successfully operated these sorts of nuclear powered submarines without incident affecting human life or activity for many decades now. And we should have the absolute confidence we're partnering with the best in the world to deliver the best in the world in the safest possible ways.

Laura Jayes: Look, you're not the only minister. Indeed, the prime minister did this in the very first announcement when this was announced yesterday morning, saying that there will not be a civil nuclear industry. So you're obviously very aware of the sensitive politics around it. You have the Greens calling, were warning that there will be floating Chernobyl's. But if we are going to have these nuclear submarines and we're going to open up this industry, why not have the conversation about nuclear power?

Simon Birmingham: Well, firstly, I mean, they completely reckless and irresponsible comments by the Greens and they betray any sense of knowledge, accuracy of the history of successful operation of nuclear powered submarines by the US and the UK. The broader questions around Australia's energy mix into the future we're addressing as part of our energy policies and as a country, we've seen enormous transformation of our energy markets already away from traditional fuel sources towards greater use of renewable energies. And that's a transition that we continue to work to underpin with, with other supports for the reliability in that sector, for the dispatch of baseload energy, when it's required in a dispatchable way, such as our investments in Snowy 2.0, in the battery of the Nation project with Tasmania. That's the pathway that's been well thought through as a government. Our policy in relation to nuclear energy has been consistent since the Howard years as a party, in fact, not just as a government and that has been that a lack of bipartisan willingness to consider means that such long term investments just aren't feasible.

Laura Jayes: But Labor is bipartisan, it seems, on this deal on this particular deal because it needs to be bipartisan for it to survive, and you're making the same point about nuclear power. So if you can do it on defence, surely you can work on a nuclear power.

Simon Birmingham: Really, that's a question for the Labor Party in terms of their willingness to even entertain, you know, the way in which we've structured this on defence has been done in a way that pleasingly has delivered that bipartisan support. But in part, that is because of that technological change that I outlined before that, I think has given that confidence to the Labor Party and should give confidence to all Australians, regardless of their views on nuclear technology, that this is the most appropriate and safe way for Australia to do so in a very confined sense, but still to get the best possible military capabilities for our future.

Laura Jayes: Simon Birmingham, good to talk to you. It didn't even talk about COVID for once in I reckon in about 18 months, so.

Simon Birmingham: Good to talk to you. That's worth a drink sometime tonight Laura.

Laura Jayes: Indeed, enjoy it.

Simon Birmingham: All the best.